Common Stock

A stock's market value would normally be higher than it's book value.

• True

• False

Investors should never pay more than par value for a stock.

• True

• False

The investment value for a publicly traded stock can readily be found in the financial section of the newspaper or on the internet.

• True

• False

If a firm has a 2 million shares outstanding and its stock trades at $25, the company has a market capitalization of $50,000,000.

• True

• False

Another term for the stated value or face value of a stock is its ________

• book value

• liquidation value

• par value

• proxy value

The value that represents the amount of stockholders' equity in a firm is called the __________

• par value

• book value

• liquidation value

• market value

The value that investors place on a stock is called its ________

• book value

• investment value

• liquidation value

• par value

A company's board of directors must declare a dividend if the firm is profitable.

• True

• False

Shareholders who sell their stock on or after the ex-dividend date, but before the date of record, will still receive the declared dividend.

• True

• False

Stock dividends do not increase the value of a shareholder's position.

• True

• False